Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Maxeon Solar Technologies Fourth Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Mr. Robert Lahey of Maxeon Solar Technologies. Sir, you may begin.

Robert Lahey

operator. you, Thank and conference everyone, Maxeon's quarter fourth Good welcome earnings call. XXXX day, to today Officer, Peter With Financial Chief are us Executive Strohbecke; Chief Officer, Bill and Strategy Officer, Aschenbrenner. Kai Chief Mulligan;

few housekeeping Bill. to Let me cover items I call turn before over the a

the a on Relations As later a will available Maxeon's of replay reminder, page call of this be today Investor website.

those factors supplemental Maxeon's uncertainties today's safe website. forward-looking we will these are the other documents subject today's risks and and deck information During harbor for release, this also that Investor Relations to have the additional Events in of statements regarding of slide today's that may call, that make page call, enhance XX-F To described those forward-looking SEC presentation, see on affect we a posted press filings. slide the statements. are various and Presentations Please

well appendix of release, on well to Relations GAAP Also, directly supplemental slide we Please call. for Maxeon's will refer reconciliations. as today's measure GAAP the reference comparable to today's most as certain of presentation relevant are a available our during website of which measures as earnings the the Investor non-GAAP as deck non-GAAP both press

Mulligan. call the to that, me let With turn Maxeon's CEO, over Bill

Bill Mulligan

everyone. Thank you, Rob, and hello,

This great R&D SunPower's and CEO, Maxeon's to first XX is is of my experience leading operations earnings and be over it call as years back following teams.

I our customers Europe in spent During in sales my R&D our at employees marketing our CEO, in both and with and time sell and as months and fabs of with Mexico. Modcos Asia first half a headquarters, California at our team

with in strong the well-established customer visits one demand high-performance a that was distributed the and utility offer growth These advantages, panels, for I competitive markets other of scale. generation opportunities them. have profitable in market exciting in by Maxeon we has presence strong global both these two and U.S. reminded

initiatives for Board predecessor, also to by for to over last leading a Waters, executive like cohesive the And putting credit these team. the high-performing position leadership to my management transformation our give credit team take our great years. advantage bold to Jeff Maxeon two I opportunities and give of in behind to executing I'd

efforts. channels their fleet, the technology world's the expanding and beyond highest-margin we updated of panel panel expanded and generation to manufacturing have to strong Thanks the an ready in Today, the ramp. revenue streams sales latest highest-efficiency markets,

innovation Technology been of a has ours decades. legacy strength for

that of highest my accelerate efficient of quickly. be priorities can be deployment and and development one forward, panel solar Going more to scaled technologies will cost-effective

will the continue invest to beyond and in our improve strength will in offerings experience DG panel provide We channels. differentiation that end additional customer and

profitable pursue excellence believe aggressively I cost in most industry. in Maxeon that reduction existing one manufacturing companies make of also manufacturing will the this solar our the facilities. and can combination We operational

provide an financial fourth conclude distributed now scale initiatives lens our utility our the and we'll And update review on businesses. of our with quarter generation will then I'll key Kai and through Q&A. and outlook, performance accomplishments and

driven plan, that above by our ASPs that by outstanding strong growth, and start to by work Maxeon delivered group in results beat were reporting QX me financial Let targets. COGS significantly shipment our well solid operations

positive gross generated quarter. we adjusted QX of are result, a million positioned well in profit in $XX and As over current for the EBITDA

their volume grew Our year-on-year. revenue more European strong Europe was channel. XX% and by in than again once in our DG and Shipments led direct-to-installer business team

deployment now business. rate approaching are European roughly of gigawatt We an run our in X DG annualized

HSPV joint share different key increased Germany Netherlands, services We driven partners that such our X,XXX sales in shipping, Belgium, France, gained the competition. from this countries, and in-person by several training incorporate network comprises venture. as over sales market largely credit, make direct planning fundamentally and and strategic European Our business shipments channel including from our

electronic France. XX% module continues particular year-on-year. module our and was was pricing Netherlands, DG joining were digits, stable such higher than ASPs In total roughly X% sequentially and and by other of Italy XX% with a spot Maxeon more for led shipments the AC up account a long-term up where on and mix Europe than power the bright of more sales. quarter, year-over-year outside strongholds, States, shipments DG United of Belgium above market rate as fourth majority in the and a attach double the Blended XX% AC shipments France to in share increased

AC to expect new. AC this continue to modules in growth We where are mix our by relatively markets increase year, driven

revenue from EV drive increasing reserve storage expect XXXX solution also contribution and our chargers. SunPower SunPower in profit We and

The storage in last launching products Spain. Belgium, our in orders is received in were quarter Europe and team and first storage starting Italy soon, Australia,

to business. Turning DG States our United

are our and segments for XXXX in where of market U.S. is market the California healthy, of DG an some the Northeast. in are demand including led We cost seeing experiencing of price. demand terms growth demand, premium cooling and by locations, environment the products Maxeon's high excellent of segments positioned volume Unlike products are power that

of is more on strong our relatively products customers' areas try and playing to sizes constrained markets conditions. Our to common roofs. our power proposition these roof value saving and in particularly factors roof Both small product the deliver to the because leading of ability

savings on simple these and of strong business than installers part Also sales a often observing in more on value solar based in markets, savings. and increases one long-term have to rate loans. cost leases states alternatives engineered competitive as around long-term processes the the focus year utility rather PPAs inflation on a We are mature with cash these seeing loans of

interest for we states of value. sell due growth rates, demand seeing cases countercyclical long-term higher experiencing from installers cooling who some to are solar Even in

abrupt new in to pleased as and where mutual last demand for exit SunPower present Maxeon XXXX. segments terms the are U.S. isn't in residential our We large year, increased through we has of LG. expansion see modules recently SunPower the market, announced And we our of exclusivity have U.S. discussed XXXX opportunity for premium for due to and of X the the where relationship commercial with

channel, with this take those We're and with to the installers capabilities of to how focus training Renewables. on technology into relationship, distribution installers translate both improved outcomes benefits excited Greentech's partnering Greentech homeowners. U.S. on leverage we advantage this our In of to new and energy benefits unparalleled for and our expect our financial opportunity

During our multi-tiered similar XXXX, we a out United the plan European elements of program States, to roll channel to in structure.

XXX XX-year partners unique We're provides incremental and efficiency which selling proposition another are and this new selling mind. installers in XXXX to with both planning peace X SunPower's which Maxeon industry-leading offers with all the enhanced over channel, channel. channel to technology homeowners in We U.S., Maxeon exit warranty, our of new our

strength In summary, in business our the confidence our is high. global DG of

increased that and demand in HSPV strong with meaningful Australia. availability panels contribution of performance ongoing believe top continued in new SunPower and We growth U.S., line our In reserve U.S. from in up volume DG XXXX. support of from will set expect strong Greentech products Europe through and Europe, us we the addition on contracted minimum for channel the our growth volumes of our drive

to market technology. North on We American utility-scale remain manufacturing allows provide with transition leading-edge us to our States of United the focused our supply our positioned customers reliable where Let's business. uniquely primarily footprint now

a various stakeholders. in corporate which profile to have We also important anchored values, is strong increasingly ESG unique becoming

list module named manufacturer year, the the most sole an recognition on be Knights welcome world's we silicon a focus sustainable honored are this of leader in Corporate of on Earlier the sustainability. to our becoming XXX corporations, industry

XXXX. for gigawatts key X.X who supply of value proposition terms, discuss deep customers number our his have additional an extending in which contracted new Kai a to will for bookings plus advanced through of in call, guidance gigawatts Our deposits with some secured commentary. has commercial last customers by and, into include been cases, X.X Since XXXX XXXX adjustments been with all earnings have validated backlog repeat options

is in backlog completing production and place, cell focused on solid a our of primarily business mono reduction. With cost growing driving in and PERC this attention ramp module the our and multiyear

this Our capacity the to to expected gigawatt full ramp performance of X.X is line by summer.

to our within input materials, better-than-expected And quarter which financial are the contributed achievement targets decreases supply the long-term finally cost seeing XXXX. chain which front, fourth on toward On we our of trajectory model key support results.

progress in of Energy's due stage Program our is Department with Office, the to which of the continue the planning Loan final and diligence We process. are facility U.S. manufacturing of LPO with the

at process, lot our to adjusted months. benefit next expect achieve completion first IRA we future from model years as significantly positive and quarter at end month to There planned Subject in of is ramp to EBITDA we plan to Maxeon are U.S. manufacturing of this we our of excitement incentive XX the within the on successful financial our this as the long-term deliver capacity. currently a expect

Kai. to I'll with turn And over it that,

Kai Strohbecke

and Bill, you, Thank hello, everyone.

guidance our from quarter as end the discuss quarter market. to of Revenues line capacity were of and scale sequentially near range then of operational above up million internal last XXX $XXX for as our details XXX current progress and growth performance U.S. of quarter $XXX our XX% shipments will is attributable fourth fourth Total and the DG high strong full and range the utility to megawatts. guidance slightly the performance demand million, for The year. the I well the were megawatts, for quarter's million. XXX guidance drivers the provide to for $XXX

our well output the strong channel. ASPs line as The as as DG. incremental in by into from quarter-on-quarter, were the U.S. as for were U.S. SunPower performance new IBC top-of-the-line XX% panels primary for supported drivers Mexico shipments volume our by well up ASPs DG healthy Modco

from margin year. XXXX. quarter in QX the the and quarter became the fourth standalone of profit a company million higher second profit represents ever as and X.X% as gross a well It margin in was since first gross Non-GAAP previous of margin our $XX up last $XX is positive the gross the highest million, $XX million quarter Maxeon trough since than

million the While performance well at in factories $X falling gross expected. for faster supply quarter, operational in the our guidance expectations improvement outperformance results as embedded exceeded million than especially the we costs, $XX Malaysia in The forecasted this were margin freight chain reasons to our primary and line as being range. profitable Mexico

Earlier term in there freight opportunities near by XXXX, contracts. long-term in were slightly the costs into reduce entering to

believe pull back and flexible cost strategy. Maxeon opportunities the at would more we ultimately prices a with realize time, could these time over savings While spot tempting greater were

to been sooner P&L. than prices and declined transfer hence which positive declines faster in our result track China shipping have Last for Polysilicon spot contributed anticipated. better-than-expected price rates with And indices. HSPV, a quarter, our market for also

significantly X basis, more On unfavorable than the This from the goods the is we a $XX improved supply cost for providing same contribution At bottom utility was favorable year-over-year year-on-year average increasing million, performance materially introduced favorable time, when are resulted of in a scale of impact of line prior impact an uplift as inflation our the cost ago, products sold quarter. no chain they a comparison Because million to exists. less on saw ASPs than U.S. excluded our were our $XX total line. quarters $X year market of million. an per

charges improvement sequential approach ramp $X in as for performance demonstrating the totaled line of products. quarter, capacity the we our Underutilization million completion

Our $X fourth of guidance of December are costs, cease announce remaining impact to until reporting immaterial, costs expired quarter out-of-market this small to polysilicon any our related metric With cost contract now XX ran on we of which sold that that will included we long-term XX a years be this were amount million. and contract of executed forward. now XXXX. ago These goods to a were going happy expected below

quarter better were guidance of million to the or previously expenses negative $X million margin. quarter than in our that on gross operating minus million million. our $XX guidance was fourth of plus development $XX to significantly in fourth the million negative $XX EBITDA compared impacted Adjusted our million and mentioned the favorable Non-GAAP $XX based $X

$XX to as higher $XX quarter-on-quarter. at million attributable tax compared our the million well driven to quarter-on-quarter stockholders net provision prepaid $XX mark-to-market the swing in in mainly million loss previous GAAP as forward $XX came quarter, million by a income of in valuation

and cash, $XXX cash million We Moving end $X our spend continuing were ongoing the compared quarter. restricted sheet. was to of fourth line as at at cash below initiatives. sequentially quarter guidance balance with short-term our equivalents, discipline on other flat DIO maintain million which payment investments range Capital on XX fourth the the while of was the $XXX days. third closed expenditures quarter the to capacity performance to in and we million,

on X are of a to by Maxeon Thanks particularly improved have gross pleased ASPs exited positive and sales now enjoys We geographic execution ramp successful DG, margin in trajectory, improved very XXXX to the based capacity our and a which cost with strategy much structure. optimization team. the

of milestones a margin quarter EBITDA of long-term are end an model, post XXXX. XX% of least including margin at financial and positive XX% to financial to and least adjusted the our by sales adjusted at next achieve Our gross EBITDA of

that Previously, our growing benefiting from to chain improvements. X.X we facilities, transitioning getting to increasing of and all the supply Many breakeven utility-scale assume higher substantial ASP gross following to cost levers: fully while the in Europe, already XX% sales from U.S. degree are line indicated these ramping beyond residential gigawatt momentum. panel margin progress and performance ongoing levers key now showing contracts, some

part broad of a adjusted portion been First, previously renegotiations. below-market our of a as utility-scale of ASPs has package supply

of and business our the cost on of combination benefiting expected chain Second, been mentioned, a both cost supply DG sooner And as side. ASP have Bill factors from reductions realized the expected. than is some

significant first quarter progress the in year model. As further long-term expected towards to half we our the a now result, progress second the expect occur as financial with in improvement margin of we

full for million With products, to We million. million. range IBC shipments XX% $XXX of this of context for turn ramp this our in to gross mind, utility then product midpoint XXXX of a of shipments the increases our to of of project view of year. and the $XXX layout are revenues shipment profit ASP the performance these of an by gross is higher quarter first profit $XX scale our our The first utility our expected Non-GAAP $XX midpoint, to relevant mix in to and guidance due U.S. for guidance margin. quarter At continued guidance million a scale numbers I'll ongoing customers. the be represents to offset line now

The ramp our unit improvement sequential to largest contributor performance line on cost due with reductions respect is effects. to

through utility of as We first of due our pricing some quarter ASP to the with channel, together to Maxeon's also supply scale, improvement see residential as SunPower. expect shipments adjustments our improved agreements well with new in of impact

Adjusted or to This the expected margin. Non-GAAP in channel, which enable minus plus $X both includes guidance EBITDA be results. Maxeon's X% in expected are expenses for be EBITDA operating to panel the the and million, midpoint, this improvements million are to spent represents a beyond gross is million gross $XX driven our positive EBITDA and significant At in largely adjusted increase $XX U.S. expected adjusted of $XX be a residential relevant slight our margin million. would between by profit. incremental first

$XX to First quarter million in be range million. capital the to expenditures $XX are projected of

manufacturing, for Energy, expect and Further sold to well completion CapEx the of X customer of capacity to excludes platform. technology finance U.S. for loan of million the completion technology for market, CapEx any primarily in with our We performance X capacity $XXX be preparation annual capacity pilot corporate the line year initiatives. U.S. to range This into Maxeon for the of the product the guidance and as U.S. $XXX operating to spending Department Maxeon channels be our developing we co-investments. which X manufacturing of Maxeon total as manufacturing for line expansion for plan various million

Previously, not we guidance. annual have provided P&L

volumes About of $X.XX majority the $X.XX half year. billion. We behind our position entire revenues we are of are revenues pleased billion so. we fixed on the transformation these in that are and be now to that for based us, range to do to contractually in are project With XXXX a the of prices

positioned we and and of Europe diversified fixed For the demand that growing U.S. terms, not are to those our contracted feel well business due parts at in

million with year. long-term to our before the model achieving million, exit expected adjusted margin year full we $XX consistent be EBITDA and financial levels $XXX XXXX between is

increase guidance the quarter margin As our with these best imply, expected quarter fourth we current expect to quarter margins targets and first to from on our and percentages. dollars further levels both be

and we channels line ramp contribution utility our scale incremental residential are as product. performance our as ASP expansion margin panel The plus new as on beyond followed related well of from and primary facilities our the XXXX improvements shipping by operational commence bookings levers,

to to before go call the With that, Bill summarize turn we to Q&A. I'll back

Bill Mulligan

Thank you, Kai.

help industry a in The and in on has adjusted I As the and in year. while start in panel operational expected positive our throughout my leadership the technology profit company most goal the strong the channels. in first XXXX to cost my one Maxeon by global with reduction quarter guidance solar is for make companies opening and EBITDA driving capitalizing aggressive increase excellence remarks, of mentioned manufacturing profitable

As we top to are expansion. expect line bottom opportunities we pursuing growth future look several year, beyond significant drive that the and current we

please Operator, Now to Q&A. let's proceed. go

Operator

from [Operator with comes Bank Instructions] America. [Alexander the question of And Bavel] Please our proceed. line of first

Bill Mulligan

Julien, take it? you to want

Julien Dumoulin-Smith

Dumoulin-Smith very Hi, to done, good Yes. here. got much Thank afternoon. truly It's I Julien impressive. say. you well

want end, just you quarter exit to mean little So first about of 'XX I course and about the as what in from in achieving as the guidance. talk Can What's to inflection here you're we bit a talk of about do margin run of here here? I as here margin to you the far in the gross bit in the that think the how the the a rate? first that little it already fourth seeing perspective a cadence we're course in suggesting to year XX% quarter. want get good you in through quarter chunk a obviously the you're talking year the into here the

talk considering what that effort? what imply scale like and you for might similarly, outline the looks manufacturing your ahead, the And year utility domestic comments then that made the about you also can even for

Bill Mulligan

off the for to continue we obviously Thanks improve expect and that question. year. Yes. XXXX Mulligan. starting Yes, Yes. to strong, throughout Hi the Bill business Julien, we're

seasonally specific into Maxeon some typically QX but strongest to As expect our also quarter, parameters you we probably here. play know, is come

Perhaps could that. a about say few Kai words

Kai Strohbecke

Yes, absolutely. words for your Hi, encouraging Julien, here. thanks and

our we X you slide we on may of want in deck margin want you're that put slide So our to in of had right trajectory. a And also that gross to a U.S. A margin as sooner dropping steep together. costs freight levels, together above guidance, that of operations for non-GAAP than little already -- We the also on before, few specialty guided reference because out for in you had in here basis breakeven profit of the quite the fourth and because breakeven point quarter. anticipated. faster levels, things but gross Page to and reference a outperformed improvement terms outperformance we partially mentioned a the I performance we line came

Then the first our and here, further in improvement areas. as into U.S. to those some we you from going improvements are performance come quarter, improvement look see continued

We continue going further to down. ramp. to come Costs are

boost of to there or when gives do we've of bit cost are lower that We reverse expecting further market write-downs some we reversals. a these inventory the always that had a

And of benefit in, of would quarter. that that delivery kick also, some economic point contracts done business. those are going I renegotiations U.S. from some to first have we the out Furthermore, our -- have customers with some the for in had we strong the

have new residential strong very, supply We is supply very SunPower. agreement got renegotiated extended U.S. our our ramping. channel and We our area. Europe -- our expanded and with a

in IBC, seen in we quarter. the fourth and quarter, first expect to continue ASP the to increases do have We so strong

improvements things fourth within we to performance year have guiding. that to the lot model the get then as year financial expected expect we also achieve together the us of expect here through and a highest XXXX. of and then levels to for are the long-term our the quarter, further we quite kind there's So coming And

Julien Dumoulin-Smith

your you you do year, about of to trends the to this to here. the Got will. given on a benefit bit I of want improvement ASPs mean, it's yourself and passing customers it, input the some the backdrop, to through ability if talk cost think hold you sustainability guys. course here. the the or How here, that nice along little given And a obviously, here of just on if that

Kai Strohbecke

we our Yes, said we we ASPs the year our projections those remarks, confidence are here locked in about out. for in have And our really, on half prepared in based of as good projections. put really that

that our but in strong also really So some comfort, with positions, us definitely positioning, gives have some products product very, we very some markets.

we high think we have here out put really confidence. projections So the are that

Julien Dumoulin-Smith

Got it. Excellent.

scale the on Just utility side. on build-out the

considering prepayments. any mean quite et I how Just demand to be. status on seems on comment with there the DOE, a much statement just it's cetera,

Bill Mulligan

Bill sure, Yes, Julien, about U.S. project. this Yes, again. excited really I'm

battery may few industry been As closely. know, last what the very IRA years, for and you I've been following in we've became the the legislation working

but while getting there, was think applaud to funding. for didn't enable the mandate administration the done happen, for a we it to it we and going DOE For their

controlling the IRA is for energy energy security, the a So manufacturing back renewable increasing economy. game-changer our in real jobs, good U.S., bringing by national

Given North this. think, is project Maxeon benefit project experience long quite from the is U.S. market, given Silicon IRA And really footprint, believe Valley strong in Maxeon the with out really economics, to we and I consistent American the the were incentives. a we've well heritage, really got the favorable our positioned administration's objective there we believe

mentioned working remarks, soon now And I into as the step due as in with online as Loan last we're is bring prepared diligence this to capacity DOE. the process. So Program this And we're possible. Office the my in phase

Julien Dumoulin-Smith

speak Bill. Well again, you to congrats it. And Excellent. Got guys welcome, soon.

Bill Mulligan

you. Thank

Operator

And And Please from question, one ROTH moment line the Shen it please. MKM. for you. proceed. Thank comes of Philip with next our

Philip Shen

improvement Hi, want as and margin there. into SunPower. outlook for relationship echo congratulations the on with Thanks guys. well the the dig questions. updated I'll to the I

You It guys a seems it's strong healthy year. had one. that and announcement earlier like this

maybe from in last quarter, how talked you on might about of XX% your think SunPower maybe in be XXXX, guys mix I XX% DG down XXXX. the down

relationship, of volumes. your is -- got SunPower of a imagine to the going that take to chunk of IBC larger expansion With I that

follow-ups share was So might could that few And here be? wondering have a as well. I what I'll you if Thanks.

Bill Mulligan

it's I an for is we to it mutually hope this We're Yes. extremely long a keep of Yes, customer Hi, And time. about SunPower going long, think beneficial us. important relationship. really course excited Philip. and for

contribution don't more Kai, if there. overall know specific I terms the add But in of think could don't something volume, that's you we disclose. I color towards generally there's any

Kai Strohbecke

No, business been not you growing where fourth business the overall quarter €XXX a down to don't can third revenue our I million refer We on really can much. the quarter. in see million to revenue customers. in prepared you that's from deck, break by our basis €XXX the DG

So also -- some the But U.S. breakdown U.S. of you of as concerned, DG regional a Canada the channel. plus far and Americas, are and this see is there. the U.S. our utility of as course, scale combination downfall now of

Philip Shen

it, earlier SunPower Got a it, a to follow-up on a guys. a but than you totally from bit given the you year, incrementally, to and forward-looking there, Is And announcement volume just had quarter end statement? I of XXXX. perhaps got there's imagine basis, as get share quick guys I last this expected more little the did that fair

Peter Aschenbrenner

Phil, I one. take is Maybe that Peter. can this

customer think, by out I price Bill don't, or break volume typically we matter. So for again, said, as that

been volume, there's shifting more our that I to demand for can And than overall the ASP. IBC we the think say process it's we've fair optimize allocation to serve. particularly more of product, of some product in around there's our

the bringing up the think are long of healthy In very means U.S. options have important term. more to channel, in new the product And the two is I going highest. the that though, ASPs there where and also our own which of we strategically general, ASPs

to channel. balance Greentech supply new a between to there's the SunPower supply there and So

Philip Shen

potential you happen? I well, that is module you And about in out at with or price from it. guys decreases I talked it recently. year something a recently might month that And that's then as think to it. the network? dropped now, is of - started your we end maybe Great. may just then or identifying that so. that last running think Peter. SunPower to do you you, resi your until were expect and volume dealer or there Greentech, that risk as that ago solar something What's relates the Thank looking dealers all Got jump How not Is from network

has perhaps Has at impacted Thanks. in there curious but can bit, a lower maybe little if talk guessing segment, anyway? just dynamics? guys through those all, some much not of -- reduction that kind price premium the the I'm at you of you so

Bill Mulligan

of strategy there. unaddressed look some portions there's there, overall the the the of out supplemental see is just a there. to with And Yes, product. you there that the get dealers SunPower you portion market not where can't hope of our we market Renewables Maxeon can the large Greentech really to There's of go if material sort address is at - that

the goal. LG that recently. our opened that's when And So up left market fairly

So we're the trying to dealers. stay fill that hole SunPower and away from

Philip Shen

Great. if in talk you may. for DG through like Can structure the margin maybe maintain I is One the last not, looks one, does kind through or U.S.? higher Europe here the here? versus the resi what if I Europe able know talk of pricing us margins better the for margins U.S.? to that smaller how And but directly the U.S., correspond in to is

Bill Mulligan

talk right? IBC U.S. paying on for a and we're been we why have side, reason, say So moving what But I for for - fact, times we margins. margin, the is optimizing, optimizing would are volume So better it only the why to more but here, better in proxy, because that's also and price, about often the not pricing, are it as we prices. we

directionally, the in that's So why are we it. better and margin doing U.S., the is

and there. and Australia products. the to then microinverter just Beyond Panel talked which about now Panel Europe In the extra addition is established going not point rate, are at our In and storage attach that charging that, make business, we in with Europe a to business, afterwards are the to Beyond point XX% EV than to are soon more includes we enjoying we stop and starting another going where we we're and with

are are we to the these have dollars. going So initiatives but also boost that margin margin percent, that

Kai Strohbecke

So maybe different in note the the U.S. little is I to and currently that product that Europe that can just the our - is and add portfolio a one that, and DG venture. source which we products European our sale, line, of the from a healthy have also in but HSPV our U.S. joint market, performance dose not - we IBC in only for

of and overall through we're two So of our sort to volume a we've got increase able weapons ways. different portfolio there, there channel in

performance And the a optimization so but we're little across on optimization Europe in not also IBC constrained about tap really capacity capacity, is relatively only bit more that with of talking the an line

Philip Shen

Kai, you forward more. very to Bill, Peter, looking guys working much thank Great, you Bill, with

Bill Mulligan

Yes, great likewise.

Operator

Lee from our And comes Brian with moment next Sachs. proceed. One it the line of for question, please. Goldman Please

Brian Lee

One taking apologize afternoon. of good I three in had, hopped if advance some been apologize I on late, guarantee ask steps guys, interest just of it you the them elaborate I loan asked. these for kind Could as that? was the at questions. sounds ask are of like I'll I'll time, the timeframe so the and in questions next all Thanks what here. just on to once. Hi of the there's process, kind update I DOE an and have on any

sales have related maybe you be that just question in Second us a through Is or guys increases being mix lastly around 'XX, been have seem know bit that. to see beyond? color into maybe about talking have content, even sold 'XX then you on ASP's double-digits. like-for-like give up They would you XQ. did and around And jumped I out price domestic of little

premium. and you back gone adders for your that are pricing uplift domestic content customers you giving Have embedded any

recently or have that all some I is of wondering on think call their status up of Thanks, capturing running of a about what U.S.? and on kind value. the lot I talked in first you your $X.XX your $X.XX facility three gigawatt Once guys. just the peer

Bill Mulligan

Peter pretty managing has Brian. hi, been the DOE project Yes, closely.

program with office. him the are where speak we to loan let I'll So

Peter Aschenbrenner

Actually, just Brian. with let Okay. second the first, me question start

The other two related. are

ASP did, up yes, significantly specifically IBC mention double-digits. did prices we our we in uplift QX were So fairly

so And a saw issue. lines, the real not of increase most you ASP strength there the individual ASP product within mix a was factor

phase remarks approval we conditional process the on were loan. due With the respect to next which the DOE diligence of phase, now is the milestone loan, the last in that of be will prepared in we said the

towards And we're with hard so, DOE. working very that the

we since exposed not are content, anything not manufacturing domestic really the of U.S. yet, terms in that In the we're to

to and contracts And U.S. we our haven't signed yet that out. plays so, that's going how factory any around see we're supply

are that but content in margins that in able be that the ITC we're credit for yet. to something to it's be We manufacturing buy we'll and that not the we're confident for U.S., able contracting sales adder, we'll confident domestic both take

Bill Mulligan

point out, bankable give able from to tailwinds I Yes, content does provider will guarantees supply take market today. although reliable with do of we're benefit as directly, yet being Western solar us not we the a and so, viewed the advantage in reliable that U.S. domestic

Peter Aschenbrenner

out chain extremely into - supply is portion U.S. our course, Mexico the efficient certainly the the of of Southwest into of And

Brian Lee

Okay. pass I color, the appreciate guys. Thanks, on. it I'll

Operator

Thank you. James. of the question, from our Molchanov And Raymond one Pavel line proceed. with comes next please. moment it And for Please

Pavel Molchanov

Thanks for taking the question.

we're or factory theme, the side will for would the more Plan, European you if me the Inflation that France were European Act. which some way? in that your on Reduction this perhaps example to supply about to Deal the of seek revive expand subsidize manufacturing other materialize, have but European you in manufacturing And with hearing Let a the stick and lot domestic equation, more Industrial Green like

Bill Mulligan

would these Yes, consider it it's to yes, this economic carefully the we and we'll course we I place sense say any option. closely, things think how at policies of time in always makes looking we're situation at early - monitor point in respond, that but and and too

Kai Strohbecke

key be maybe as many of would and I long-term scale same And already in us position Mexico. as U.S. with chain and - place a supply just say Pavel, or would strong Yes, What is in the evolves a add we're market both think and course, bringing in one industry there. Europe thing have on perspective. of interested can you better know that the the in sorts put the pretty than well for I I doing perspective of is that advantages from local technology a planning a here kind very quickly

in would different France. Anything quite that we we would had build be what from in Europe historically

something years. deep that probably be particular jurisdictions than extent in would into past the to in were any operating I quite that Europe, different or what it few without So we regions, the would decide to we say build going

Bill Mulligan

have strong Europe footprint, - of experience. Yes, we we're in global believe of a experience a our given but decade over we lot a well Maxeon, in

on talented or to of people execute so lots got that we're we've familiar, develop, on very well ground we're to positioned So, it. the like something

Pavel Molchanov

Understood.

Turning the in ramp half you Mexico at through QX weighted back existing for of your utilization we of to Asia essentially guidance, kind the capacity looking XXXX? full will end of our plus you're revenue assume this should that obviously second of be in year, given that you

Kai Strohbecke

I going to Yes, this We full the capacity the sometime that's that we're utilization. around think year mid be good is of a to achieve think Kai. Pavel, that assumption. going

there First and the the - end of then is transit year. most in in fab the between of in so course time by of the the cell course

full running I at capacity line think performance that humming capacity. U.S. of should be everything and

Pavel Molchanov

And talking bit Into your ahead about expansion any existing again U.S.? into a of manufacturing there facilities. additional so the be maybe little will XXXX looking not XXXX, in

Bill Mulligan

our year-on-year to is XX% financial revenue at target growth. Yes, long-term show least

historically, guidance, did back on about expect, our little you a we the maybe look guidance same you mid-point and can If year, higher. XX% this based last year,

to we that we'll P-Series on capacity ramped allow confident to model. going flight increase Kai the in capacity able things of we're fully We will as be So that financial stay us with mentioned end have by feel the be do long-term year. the to

technology and full year our got X, have a activities on - we'll debottlenecking So as some to production opposed X Maxeon partial year capacity. full We've at going primarily.

Beyond be and to XXXX. the that we Panel to coming have contribute That's online, going strongly should coming so So really revenue be all our do then will online those stream.

Kai Strohbecke

add particular. on is have HSPV venture would in Europe to thing capacity that we into course for the tap joint Well, also of sale only I our

Pavel Molchanov

Got Thank you much. it. very

Operator

next Morgan And One the Stanley. question, for of you. Thank line comes David moment with our Arcaro it from please. proceed. Please

David Arcaro

Hi, thanks great so and congrats for my much question results. taking on

the if natural be? the what sites might I wondering, financial closer model. when refresh just long-term I'm getting was you reassess more point. in at and long-term financial should a there's timeframe mentioned wondering the this You model how it

Kai Strohbecke

we So to out, of I the long-term over that Bill would out the model year. like pointed financial past say point all, have And at XX% David, first stayed growth. outperformed would I just as least that

we outperform are back course, of growth trajectory of again. at We to expecting overachieve And and gross on also EBITDA margin over beyond all roughly put that probably are the XXXX a going as to year, XXXX least is in activities them kick hopefully that be are it and us this other the time. to in we far state on then to to and expecting some want profit achieve margin numbers and these concerned, as higher

see restate need So we that. don't a to right now

line next come. the we growth some at different of moving on in we first think talked actually side, fourth to quarter about I market. line the as that as the and in other beyond businesses. the going DG the the on the I still line far the then have above already margins beyond quarters And our and HSPV DG say IBC IBC is those over top performance to target of it's We is profile target side quarter. are margin and concerned up, like some provide or into And bottom businesses from panel and would ramping

model. our we So right stick with long-term financial now,

talk the at XXXX, we expect achieve appropriate We other going to time. are it things and to then within about

David Arcaro

could whether might potential your Okay, U.S. latest understood. sheet thinking been there's the manufacturing separate seeing to That's the self-financing additional using market. given balance helpful. if demand here. U.S. strong was process you wondering you've capacity your from some and consider facility I that in just for the And DOE on give then a self-finance if you

Bill Mulligan

right pretty something with Yes, DOE there. program, not I now. like we'll the we're we're looking so think advanced at We far start that's feel

Kai Strohbecke

attractive We loan is really think a source program the DOE of financing.

A. plan So that's definitely our

David Arcaro

that's just what the an looks thing outlook give latest in if could you update Got ramp wondering me, last And I the terms of fair. on X for No Yes. there. you. Maxeon was like

Bill Mulligan

the Yes. I our the Yes. was one of really Max excited of We're original No. technology. about IBC technology. X developers

that proud again. photovoltaic the that our to few increase I'm I'm a technology continues And team back to position boundaries away, now technology. of Maxeon's push a years we're So after in leadership really just

yield success and pilot the great running. its targets, been So time. the getting that's hitting has been better efficiency line quite all It's a

more expansion So in be we've some started Maxeon operation. talking of they existing later for in currently Philippines, upgrades. our one our laying not plans doing facilities and facilities going terms that's be And it yes, in of out. in We're the about to X the building as groundwork come we'll

David Arcaro

Thanks much. color. the Appreciate so Great. Okay.

Operator

moment line please. the comes Northland next And you. one Donovan Please of from proceed. Capital our Thank Schafer Markets. it with for question, And

Donovan Schafer

gross positive Hi, margin. the guys. Congratulations on

Operator

Donovan, voice? excuse lift you your Can me.

Bill Mulligan

We can't hear Donovan. you,

Donovan Schafer

Is better? that

Operator

you. Thank Yes.

Donovan Schafer

positive growth positive time get adjusted super to waiting a on congratulations long yes, finally here. outlook and So for been margins EBITDA. I've here,

Department created, are be can't or that hoops like, I'm Like you kind of past? may milestones what with? at share seems that the you've are you have asked and a of to it. just sort -- already of see So for maybe in Energy I that give in we loan what you a you can probability can't due also of determinations but very about wanted think guarantee. the cool with like you questions I kind dig got of make and would to pitted to helpful. on are It's the gotten -- you How I already -- do hey, to projects probability. have like us like that. lot can wanted helping a number of context process? are Is could pool context, determination of turn that they kind limited in already XX.XX% But it if this far you pool what against I know other give And All you the applicants to sure talk about estimating guarantee jobs like you have diligence pitted that But point if internally, people they of have a that. know are? with work -- limited against broader like already? that other you've the

Peter Aschenbrenner

based that this last Okay. is Peter. Donovan, on guidance I'll Bill's time. take

So to there's a couple your question. parts of

their is committed in in that's of the been we First the the projects quite funding the think funding in good think, there passage currently the said they other to What from want past, funds projects? chest the before we as were and are And what queue infer can we of IRA. well from to do. that, war I all, against is that early pitted I have DOE enough we we've both heard,

position, in risk think of the I we're et of good a the to project, cetera. the both technology jobs, quality with So respect the

create. trying jobs se. I what you up clearly, DOEs give if scores I doing in creating But sort job the for that through don't clearly, job per basis how U.S. to don't creation to is facilitate. they're many of and technology, But evaluate the think know scaling it's a jobs bringing they

the of of of I think think the you we of end motivated the DOE day, a DOE or think should the banker. at kind is

of So the to be kinds risk similar be doing terms of repayment. in banker what are to that going the doing any other of would evaluations they're

project. product to in bit think list the because their both the I maturity loan? and at the of top repayment of got a it. practiced of take co-invest the little technology, customers that side. I It's demand market. terms strong to biased before. eager maybe We very is very are of we're of on the what that for is the understand think we're the a We've we've very side likelihood And it's close But technology the

-- is marks I is solidity, There's go company to And so think demand, getting called parallel which that for that to as would path, those. another review they we're an like environmental going NEPA, a we're think execution, which milestone kind we evaluate get technology I risk, high of through.

my question. so And your to that's answer

at just we're time. And

question. all So hopefully, your I the got answers components of to

Donovan Schafer

ASPs helpful rough about the Thank about to megawatt there It of just is that one terms that. talk are Pavel expecting you in But of would utilization. squeeze And just already if number, about Could Okay. ship think be XXXX? could a you thinking I be of kind would I megawatts guys in you. asked and more. If in helpful. number

Kai Strohbecke

Hi, this Kai. is

for the year. we guidance this here EBITDA. adjusted to corporate provide the we our guidance the some stay the So decided away revenue annual guidance history, and at out megawatt and on for point We'll on from in specific put time first

We have obviously keep guidance we'll now. megawatt practice that and quarter, for given the a shipment in for

Donovan Schafer

one expectations ask you I probably right it's -- to just a Okay. It's be within the is could and Or change when would forgot And everything, chance be of in any facility is at process now in in a the still based all? helpful XXXX? DOE that of and for are terms there a where delayed there on production actually, everyone. just I that that gets

Peter Aschenbrenner

expectation, our still That's Donovan.

Donovan Schafer

Great.

Fantastic Okay. take guys. the quarter. I'll rest Thanks Awesome. offline.

Operator

you. Thank

questions, further no there we'll now you As are the again. conclude call. Thank all

disconnect. may You now

Maxeon Solar Technologies (MAXN) 7 Mar 232022 Q4 Earnings call transcript